All these developments follow the last week which has seen a lot of action from the RBI and leading banks like SBI, UBI, BoB and PNB. All these banks had decided to increase their lending rates by 50 basis points each. Last Tuesday, the country’s central bank, RBI, had decided to hike two key rates. The reason for the same was to reduce the supply of money in the economy, by making it costlier for banks to hold money. By doing so, the banks would make loans costlier, which would hurt the spending habit of the consumers. The Reserve Bank has been taking periodic steps to fight inflation without much success, and this move is in order to check the surging rate of inflation.

However, some state-run banks like New Delhi-based Oriental Bank of Commerce are yet to take a decision.

"The bank's asset-liability committee will meet in a week's time to review lending and deposit rates," said A.K. Misra, chairman and managing director of the bank. Any rate revision will lead to increase in PLR- related lendings such as floating home loans, corporate loans, car loans etc., he added.